Concerning the Determination of the Corporate Taxable Annual Income Amount
The Cabinet,
Having reviewed the Constitution;
Federal Law No. 1/1972 Concerning the Competencies of Ministries and Authorities of Ministers, as amended;
Federal Decree-Law No. 13/2016 Concerning the Establishment of the Federal Tax Authority, as amended;
Federal Decree-Law No. 7/2017 Concerning the Tax Procedures, as amended;
Federal Decree-Law No. 47/2022 Concerning Corporate and Business Tax; and
Cabinet Decision No. 36/2017 Concerning the Executive Regulation of the Federal Law No. 7/2017 Concerning the Tax Procedures, as amended; and
Based on the proposal of the Minister of Finance, and the approval of the Cabinet;
The following is resolved:
Article 1 – Definitions
In the application of the provisions of this Resolution, the following words and phrases shall have the meanings assigned to them respectively, unless otherwise is required by the context:
State | United Arab Emirates. |
MOF | Ministry of Finance. |
Minister | Minister of Finance. |
FTA | Federal Tax Authority. |
Person | Any natural person or juristic person. |
Taxable Person | The person subject to corporate tax in the state, under the Corporate Tax Law. |
Corporate Tax Law | Federal Decree-Law No. 47/2022 Concerning Corporate and Business Tax. |
Corporate Tax | The tax charged under the Corporate Tax on Juristic Persons and Business Income Law. |
Taxable Income | The Corporate taxable income under the Corporate Tax Law. |
Tax Period | The period for which the tax return should be filed. |
Tax Return | The information provided to FTA for purposes of the corporate tax, as per the forms and the procedures set by FTA, including any schedules or attachments and any amendment thereof. |
Business | Any activity practiced regularly, continuously and independently by any person anywhere such as industrial, commercial, agricultural, handicraft, professional or service activity, excavation activities or any other activity related to the use of tangible or intangible properties. |
Business Activity | Any transaction, activity or a series of transactions or series of activities practiced by a person in the course of his business. |
Article 2 – Corporate Taxable Income of (0%) Zero Percent
- For purposes of paragraph (a) of Clause (1) of Article (3) of the Corporate Tax Law, the part of the taxable income of the taxable person of not more than (AED 375,000) three hundred seventy five thousand Dirhams shall be subject to corporate tax of (0%) zero percent in the tax period, whether or not the taxable person transacts many businesses or business activity in such tax period.
- If FTA finds that one person or more ostensibly separate their business or business activity, and the taxable income of their entire business or business activity is subject to corporate tax of (0%) zero percent in the tax period for an amount of more than (AED 375,000) three hundred seventy five thousand Dirhams, this shall be deemed an arrangement to obtain a corporate tax benefit, according to Clause (1) of Article (50) of the Corporate Tax Law.
- For purpose of FTA investigation of the ostensible separation of business or business activity by two persons or more, FTA shall consider whether the arrangement is made for a legitimate commercial purpose, and whether the persons significantly transact the same business or business activity, considering all related events and circumstances, including but not limited to their financial, economic and regulatory connections.